China Franchise Law
What forms of business entities exist that would be relevant to the typical
Foreign enterprises have two options when establishing a franchise
The first option is to establish a:
Foreign-invested enterprise (FIE)
that would then act as a sub-franchisor.
There are three typical FIE structures that could act as a subsidiary
to the foreign enterprise:
Wholly foreign-owned enterprises (WFOEs),
Equity joint ventures (EJVs) or
Cooperative joint ventures (CJVs).
A wholly foreign-owned enterprise is independently owned by a
foreign enterprise without the aid of a Chinese partner. Though this
business structure is preferable because the investor can keep 100
per cent of the profits, the law strictly regulates the establishment
and operation of a WFOE and, in some industries, is entirely prohibited.
Although current franchise regulations are silent as to whether
a WFOE may create a franchise within China, it is likely that the law
would permit a WFOE to take the position of a sub-franchisor. This
sub-franchisor would then be in the position of granting licenses to
any local corporate franchisee by entering into a sub-franchise agreement.
However, due to the strict, often misunderstood, guidelines
on the formation of businesses, it is not advisable to have a WFOE
establish a franchise in China.
Joint ventures are the most functional way of creating the necessary
local know-how when establishing a business entity in China,
especially for franchises. An EJV is a limited liability partnership
between a foreign company and a Chinese legal person. Profit distribution
and shareholding is directly proportional to each partner’s
investment. CJVs are becoming more accepted in China but are still
prohibited in many industries. This business structure allows the foreign
entity and Chinese legal person to have more flexibility in structuring
the shareholding and profit-sharing. Similar to the WFOE,
both of these joint ventures would be considered as a subsidiary to
the parent franchise abroad. As such, each would have the same legal
rights and liability as the franchisor.
Direct contractual relationships
The second option for a foreign investor is to avoid creating a business
entity in China and create a direct contractual relationship with
a local franchisee. In doing so, the foreign business can establish a
local network while maintaining its domicile abroad. Exercising this
option allows the foreign investor to avoid the legal barriers that are
faced when establishing a FIE.
For domestic franchisors, the regulations are seen as another type
of contract. These franchisors engage in a direct contractual relationship
with their franchisee.
2. What laws and agencies govern the formation of business entities?
The Company Law of the People’s Republic of China (PRC) provides
the general legal framework for all limited liability companies,
domestic and foreign. All foreign entities must also comply with the
Catalogue for the Guidance of Foreign Enterprises (FIE catalogue),
which is updated regularly and categorizes foreign businesses and
industries into ‘encouraged’, restricted’ and ‘prohibited’. Generally,
any business or industry not listed in the catalogue is permitted.
Other relevant laws that govern the formation of business entities
include, inter alia the Labor Contract Law (2007), the Enterprise
Income Tax Law (2007), the Contract Law (1999), the Labor Law
(1994) and the Land Management (1998). The Partnership Enterprise
Law (2007) applies to Chinese legal persons wanting to establish
a business partnership in China with no foreign entities.
On a national level, the State Council is the chief administrative
authority for the formation of business entities. Acting in the
interest of the State Council is the Ministry of Commerce, the State
Administration for Industry and Commerce (SAIC), and the National
Development and Reform Commission. Investors go directly to these
administrations only if the business meets certain national thresholds
or if the business is interprovincial. In most circumstances, the local level
administration evaluates and approves the business proposal.
These administrations vary according to autonomous region, province
3. Provide an overview of the requirements for forming and maintaining a
During the initial stage, the foreign entity and their Chinese partner,
if applicable, must supply to either the local agency or the Ministry
of Commerce (MOFCOM):
• a general application letter introducing the investor and planned
business project in China;
• articles of association (including all of the details of management
and capitalization of the company);
• a feasibility study report including planned business activities and
financial background information;
• a letter of creditworthiness;
• a valuation report of state-owned assets (if applicable);
• a list of merchandise to be imported or exported;
• a list of FIE directors;
• a copy of land-use rights document or lease, or both;
• a power of attorney for representative handling the application;
• a copy of any trademark licenses, patents, tech transfer, service
After obtaining a certificate of approval from the local agency or
MOFCOM, the investor files an application with the SAIC in order
28 How to obtain a business license.
If a business falls within the ‘restricted’
category as per the FIE catalogue, then preliminary approval must
be granted by the National Development and Reform Commission
(NDRC) before submitting the application to the Ministry of
Commerce. Additional administrative approval might be required
depending on the location and type of business.
In order to maintain a it position as a business entity, the business
must annually update any new information to the necessary officials,
pay taxes quarterly, and ensure that all practices comply with the
laws of the PRC.
4. What restrictions apply to foreign business entities and foreign
The FIE catalogue contains a comprehensive list of all the restricted
and prohibited industries that may not be established by a foreign
business entity. In addition to the restrictions outlined in the FIE catalogue
is the generic provision that a business may not go against the
health, morals or development of the People’s Republic of China.
5. Briefly describe the aspects of the tax system relevant to franchisors.
How are foreign businesses and individuals taxed?
All business entities are subject to the new Enterprise Income Tax
Law of the PRC (2007). This law created a unified 25 per cent tax
rate for both domestic and foreign entities. Prior to the new tax law,
preferential treatment was given to all foreign entities by the granting
of tax exemptions and reductions. Currently, the Notification
of the State Council on Carrying out the Transitional Preferential
Policies Concerning Enterprise Income Tax contains a comprehensive
outline of specific industries and locations that qualify for a tax
exemption or reduction. Typically, a franchise will not qualify for a
tax reduction or exemption; however, the franchise may deduct payments
already paid abroad to offset taxes in China, but this amount
may not exceed the tax payable.
Since a franchise engages in the sale and importation of goods
in China, the franchisor or sub-franchisor must pay a value added
tax (VAT) of 17 per cent at the time of importation. In addition, a
franchise must pay a business tax that ranges from three to five per
cent depending on the revenues generated. If a business withholds
profits, the business tax can be between 10 and 20 per cent, depending
on the business’s domicile.
Businesses are required to audit every month and taxes, except
for VAT, are paid quarterly. Reconciliation is done at the end of the
year, usually at the end of December.
6. Are there any relevant labor and employment considerations for
typical franchisors? What is the risk that a franchisee or employees of a
franchisee could be deemed employees of the franchisor? What can be
done to reduce this risk?
There is a general provision that states that a franchisor’s obligations
to a franchisee are to provide, business guidance, technical support
and business training. However, there are no specific provisions that
address labor or employment considerations. As such, any labor
or employment consideration is addressed by the Labor Law of
This law states that an employee (aged 16 and over) may not
work more than eight hours a day and 44 hours a week. Should the
employee exceed one hour of overtime per day or three hours due
to a special reason, he or she is entitled to 150 per cent pay. If the
employee is not granted a guaranteed day of rest within a week, the
employee is entitled to 200 per cent of his or her pay. Finally, if an
employee works on a national holiday, he or she may be paid 300 per
cent pay. Wages are generally determined by economic factors such
as the daily cost of living in the area.
In addition, the employer must promote good health, safety and
the welfare of its employees. This includes contributing to a number
of social insurance and welfare funds that assist employees with
healthcare, housing and pensions.
Since a contractual relationship does not exist between the franchisor
and the employees of the sub-franchisor, there is only a low
risk that these employees will be deemed employees of the franchisor.
In order to prevent such confusion, the franchisor may require that
the sub-franchisor add a provision in each employment contract that
severs the franchisor from employment liability.
7. How are trademarks and know-how protected?
The regulations stipulate that the protection of trademarks and
know-how shall be handled in accordance with all applicable law
and administrative regulations.
According to the trademark law, the first person to register the
mark receives trademark protection. Unregistered marks may also
be protected if the mark has been declared as a ‘well-known mark’
by a court or administrative authority. The application process takes
12 to 18 months and protects service marks, collective marks and
The Anti-Unfair Competition Law ensures that the business
know-how of the franchisor is sufficiently protected. This law provides
protection for any information that is not known to the public,
provides economic benefits to the owner, is of practical application,
and has been subject to steps by the owner to maintain its secrecy.
Any misuse of the franchisor’s business know-how is subject to criminal
8. What are the relevant aspects of the real estate market and real estate
Because most land is state-owned, enterprises and individuals may
only possess the right to use land, not the right to own it. Franchises
may obtain this right for up to 40 years. Upon expiration of the
grant term, the land and the title to all the structures and attachments
reverts to the state without compensation. Investors wanting to avoid
reversion must, before the term of use expires and under new contractual
terms, apply for an extension to the local branch office or
Ministry of Land and Natural Resources (MLNR).
Land-users cannot resell property; instead, the land-use right may
be transferred through assignment or lease. An assignment occurs
when the land-user transfers all rights to use the land to an assignee
through a written contract. A lease occurs when the land user transfers
his right to use the land for a period of time to a lessee. The lessee
pays rent to the lessor throughout its possession of the right to use,
but the lessor remains responsible for continued performance of the
original land grant contract.
In addition, current law restricts foreign development of land,
especially the development of land for leisure activities. In fact, due
to exploitation concerns, the government forbids foreigners from
acquiring land from the state. As such, if a foreign entity wants to
develop land, it must first establish a network with a domestic partner
who has the legal right to acquire land from the state and then
develop the land accordingly. Some stipulate that this rigid requirement
will be altered as China continues to attract a significant
amount of foreign investors.
Laws and agencies that regulate the offer and sale of franchises
9. What is the legal definition of a franchise?
A franchise refers to a business operation by which a franchisor, an
entity that possesses a registered trademark, enterprise mark, patent,
know-how, or any other business resource, confers by way of
contract the resources to another business operator (franchisee). The
franchisee pays franchising fees to the franchisor and conducts business
operations under the uniform business model as stated by the
contract. No entity or individual other than an enterprise may conduct
the franchise business as a franchisor (that is, no natural person
may engage in franchising).
10. Which laws and government agencies regulate the offer and sale of
The relevant agencies that regulate the offer and sale of franchises, in
descending authority, include the State Council, MOFCOM and the
Ministry of Commerce of specific provinces, autonomous regions or
municipalities under the Central Government. Other agencies might
apply depending on the industry.
The controlling law for franchising in China is the Regulations on
Administering Commercial Franchise (2007). Ancillary to this law are
the Administrative Measures for Archiving Commercial Franchises
and the Administrative Measures for the Information Disclosure of
Commercial Franchise (2007).
11. Describe the relevant requirements of these laws and agencies.
The law requires that both the franchisor and franchisee are legal
entities. Prior to the acceptance of the contractual terms, the franchisor
must disclose all relevant information to the franchisee as outlined
in the Administrative Measures for the Information Disclosure
of Commercial Franchise. Within 15 days of the conclusion of the
contract, the franchisor must submit a signed copy of the agreed
upon terms and all of the relevant parties’ contact information to
the local Ministry of Commerce as per the Administrative Measures
for Archiving Commercial Franchises. Upon submitting the required
documents, the Ministry of Commerce will review the application
and issue an approval of the franchise within 10 days. Approval from
the Ministry of Commerce must be granted before the franchisee may
engage in daily business transactions.
12. What are the exemptions and exclusions from any franchise laws and
The current franchise law does not contain any exemptions or
exclusions. Even though the franchise regulations do not contain
any exemptions or exclusions, certain business stipulations by the
government might apply. These stipulations vary depending on the
industry and location. Other than the industry-based stipulations,
no franchise may burden the public welfare or be against the government’s
13. In the case of a sub-franchising structure, who must make pre-sale
disclosures to sub-franchisees? If the sub-franchisor must provide
disclosure, what must be disclosed concerning the franchisor and the
contractual or other relationship between the franchisor and the sub-
In the case of sub-franchising, the sub-franchisor assumes the same
legal responsibilities as a franchisor. As such, the sub-franchisor must
disclose all presale information that a franchisor would be required
to disclose. In addition, the sub-franchisor must disclose the contractual
relationship between franchisor and the sub-franchisor to the
14. What is the compliance procedure for making pre-contractual disclosure
in your country? How often must the disclosures be updated?
A franchisor must disclose all of the information outlined in the franchising
regulations at least 20 days prior to the conclusion of the
All changes in information must be submitted by the franchisor
to the franchisee in a timely manner. Failure to submit changes in a
timely manner warrants rescission by the franchisee and criminal
fines may be instituted by the Ministry of Commerce. The franchisor
must also submit changes to the Ministry of Commerce in the first
quarter of every year.
15. What information must the disclosure document contain?
At a minimum, a franchisor must provide:
• the name, domicile, legal representative, registered capital, business
scope of the franchiser, and basic information in respect of
the franchised operations;
• the basic information in respect of the registered trademark,
enterprise mark, patent, know-how and business model of the
• type, amount of franchising fees and payment method;
• prices and requirements for providing the franchisee with products,
services and equipments;
• specific contents of business training and other services to be
continuously provided to the franchisee, as well as the methods
and implementation plans;
• concrete measures for guiding and supervising the business activities
of the franchisee;
• the investment budget for the franchise outlet;
• the business evaluation of franchisees currently existing within
the territory of China;
• digests of the financial statements and audit reports for the past
• the condition of all franchise-related lawsuits and arbitration for
the past five years;
• any record of major illegal business operations; and
• any other information as prescribed by the commerce department
under the State Council.
Additional requirements are outlined in the Administrative Measures
for the Information Disclosure of Commercial Franchise.
16. How do the relevant government agencies enforce the disclosure
Failure to disclose information in accordance with the law results in
legal action by the Ministry of Commerce. If the error is minute, the
department may order the franchisor to make corrections or impose
a fine of between 10,000 and 50,000 renminbi (approximately
US$1,460 to US$7,300).
In more serious circumstances, a fine of between 50,000 and 100,000 renminbi
(approximately US$7,300 toUSS$14,600) will be imposed and an announcement
will delivered. Additionally, if a franchisor willfully fails to disclose or fraudulently
misrepresents information, it will be subject to criminal liabilities.
If a crime has not been committed but an entity acted in
bad faith, the entity will be punished by the public security organ in
accordance with the Law of the PRC on Public Security Administrative
17. What actions can franchisees take to obtain relief for violations
of disclosure requirements? What are the legal remedies for such
violations? How are damages calculated? If the franchisee can cancel
or rescind the franchise contract, is the franchisee also entitled to
reimbursement or damages?
According to the general franchise regulations, the franchisee may
unilaterally rescind the contract if a franchisor violates the minimum
disclosure requirements. If the franchisor required a down-payment,
the franchisee may also be entitled to a reimbursement of funds.
Compensation will be granted only if the franchisee has strong
evidential support that there was a breach of contract. In such a
case, contract law sets precedent as to the compensation of damages.
Generally, any monetary loss that is reasonable or foreseeable, or
both, will be compensated.
18. In the case of sub-franchising, how is liability for disclosure violations
shared between franchisor and sub-franchisor? Are individual officers,
directors and employees of the franchisor or the sub-franchisor exposed
to liability? If so, what liability?
A sub-franchisor assumes all the rights and responsibilities of the
franchisor. As such, all regulations that apply to the franchisor apply
equally to the sub-franchisor, including legal liabilities. Furthermore,
it appears that since a franchise may only be established by a legal
person, only a business entity may be legally liable, not a natural person
(individual officers, directors and employees). However, the court
ultimately decides in the preliminary hearing whether or not to enjoin
a party. Hence, depending on the claim, an individual officer, director,
or employee, or all, may be added as a party to the suit along with the
business entity. In such a case, each party is equally liable.
19. In addition to any laws or government agencies that specifically regulate
offering and selling franchises, what are the general principles of law
that affect the offer and sale of franchises? What other regulations or
government agencies or industry codes of conduct may affect the offer
and sale of franchises?
The law is vague as to the specific principles and codes of conduct that
must be followed when engaging in the offering and selling of franchises.
In general, contract law, company law and the general principles
of civil law set the legal precedents on engaging in transactions
such as offering and selling a business entity. The State Council, the
Ministry of Commerce and the SAIC, along with any local administrations,
regulate these transactions. The application of other regulations,
the involvement of other government agencies, or the institution of
certain codes of conduct vary depending upon the industry.
20. What other actions may franchisees take if a franchisor engages in
fraudulent or deceptive practices in connection with the offer and sale of
franchises? How does this protection differ from the protection provided
under the franchise sales disclosure laws?
China’s franchise regulations do not explicitly state the legal remedies
available to a franchisee when a franchisor engages in fraudulent or
deceptive practices in connection with the offer and sale of franchises.
However, the franchisee will be entitled to consequential damages if it
can provide evidential support for a breach of contract or a violation
of the principles of fairness and reasonableness.
Legal restrictions on the terms of franchise contracts and the
relationship between parties involved in a franchise relationship
21. Are there specific laws regulating the ongoing relationship between
franchisor and franchisee after the franchise contract comes into effect?
There are no specific laws regulating the ongoing relationship
between franchisor and franchisee. The only applicable law would
be the Contract Law of the PRC, which states that the franchisor
and franchisee must deal at arm’s-length and obey the principles of
fairness and reasonableness.
22. Do other laws affect the franchise relationship?
Other laws might apply depending on the industry. New stipulations
might be adopted in the near future as the implementation of the law
matures and the market begins to evolve. For the most up-to-date
information on laws that affect the franchise relationship, visit the
23. Do other government or trade association policies affect the franchise
As previously stated, the franchise regulations of the PRC are in their
initial stages of implementation. As such, the law is very vague as
to whether other government or trade association policies affect the
franchise relationship. In practice, other government or trade association
policies might apply depending on the industry.
24. In what circumstances may a franchisor terminate a franchise
relationship? What are the specific legal restrictions on a franchisor’s
ability to terminate a franchise relationship?
The franchisor has an obligation to keep the contractual relationship
with the franchisee for three years. After three years, the franchisor
may terminate the contract without any legal restrictions. The contractual
relationship may terminate before the end of the three-year
span only if there is strong evidential support that there is a breach
of contract or a violation of good faith.
25. In what circumstances may a franchisee terminate a franchise
A franchisee may unilaterally terminate the contract if the franchisor
fails to disclose information. Other circumstances are not outlined in
the franchise law, but, according to the Contract Law of the PRC, a
franchisee may terminate the franchise relationship if there is a justified
breach of contract.
26. May a franchisor refuse to renew the franchise agreement with a
franchisee? If yes, in what circumstances may a franchisor refuse to
After the requisite three-year period, a franchisor may refuse to renew
the franchise agreement with a franchisee. The law is silent as to
what circumstances permit renewal; nevertheless, according to the
Contract Law of the PRC, the franchisor must still be fair and reasonable
when deciding to terminate the franchise relationship (that
is, act in good faith).
27. May a franchisor restrict a franchisee’s ability to transfer its franchise or
restrict transfers of ownership interests in a franchisee entity?
Yes. The franchisee must seek permission from the franchisor before
there can be a transfer of ownership. The franchising regulations do
not restrict the franchisor from preventing a transfer of ownership
from occurring; however, according to the Contract and Company
Laws of the PRC, the franchisor must act reasonable when denying
a transfer of ownership.
28. Are there laws or regulations affecting the nature, amount or payment of
The current franchise regulations are silent as to the nature, amount
or payment of fees. As such, the parties are free to negotiate the payment
of fees. The Contract and Company Laws of the PRC prevent
any corrupt transactions that violate the practices of good faith and
the goodwill of the country. Criminal prosecution could result if the
parties are found to have engaged in corrupt practices, especially for
29. Are there restrictions on the amount of interest that can be charged on
The current franchise regulations do not contain any restrictions on
the amount of interest that can be charged on overdue payments.
Other relevant laws are also silent as to the amount of interest that
may be charged for overdue payments. In practice, the general rule is
that the franchisor may charge interest as long as the interest charged
is reasonable and not punitive.
30. Are there laws or regulations restricting a franchisee’s ability to make
payments to a foreign franchisor in the franchisor’s domestic currency?
If a foreign franchisor establishes a FIE in China, the business
entity is required to file the foreign exchange account with the State
Administration of Foreign Exchange (SAFE). The government does
not guarantee that the renminbi generated by the franchisee will
be converted into foreign currency. Comparatively, if the franchisor
maintained its domicile abroad while engaging in a contractual relationship
with a franchisee, then it may possess an offshore account
where minimal legal restrictions apply. In such a case, the money
generated may be freely transferred to the franchisor’s domestic currency
as long as neither party engages in an illicit activity.
31. Are confidentiality covenants in franchise agreements enforceable?
Yes. The general regulations contain a specific provision that makes
confidentiality covenants binding.
32. Is there a general legal obligation on parties to deal with each other in
good faith? If so, how does it affect franchise relationships?
Yes. Article 4 of the Commercial Franchise Regulation specifically
states that, ‘the principles of free will, fairness, honesty, and good
faith shall be followed. In addition, the Company and Contract law
of the PRC both state that parties must deal in good faith’.
Acting in good faith implies that both parties must act at arm’s length
from each other. As such, unconscionability, fraud, misrepresentation,
deceit and other practices of bad faith warrant rescission
by the promise and the payment of damages from the promisor.
33. Must disclosure documents and franchise agreements be in the language
of your country?
The franchise regulations do not stipulate whether the disclosure
documents and franchise agreements given to the franchisee must
be in Chinese; however, all information submitted to the local agencies
and MOFCOM or the SAIC must be in Chinese. Furthermore,
the Chinese government requires that all claims and documents be
translated in Chinese prior to submitting a claim to court or the arbitration
34. What restrictions are there on provisions in franchise contracts?
The regulations do not provide specific provisions that restrict
the terms of a franchise contract; nevertheless, there are several
laws that provide certain restrictions on doing business in China.
Recently, the State Council released a general declaration emphasizing
that businesses may not limit the transfer of high-tech knowhow,
engage in willful deceit (especially in regards to the validity
of patent rights) or create contractual burdens. Most importantly,
China has recently adopted an anti-monopoly law which will add
certain restrictions as to establishing franchises in China. Generally
speaking, the government restricts any practice that would
be against the national interest including, inter alia, illicit trade,
exploitation of others and willful misrepresentation. Specific restrictions
depend on the location and type of industry the franchise is
It is important to note that the new regulations seem to impact
foreign franchisors more than domestic franchisors. Domestically,
these regulations are merely a different type of contractual relationship.
For the foreign entity, not only must it comply with all the
applicable regulations according to its industry, but it must also obey
the current stipulations. Overall, the current regulations have added
another layer of restrictions for the foreign franchisor. In addition,
foreigners often run into cultural barriers, especially when establishing
a franchise. In order to limit these systemic barriers, it is strongly
As the franchise regulations mature, more clarification will be given
on how to establish and maintain a franchise in China. In fact, the
State Council is continuously producing declarations or supplemental
regulations that provide more guidance on the implementation of the
initial law. As such, it is essential that each interested investor keeps up
to date with information on the law.
Current and future franchisors should pay attention to the effects
of the newly enacted anti-monopoly law. Many foreign investors fear
that this law will be used as a tool to further restrict foreign industry. Of
course, due to the recent enactment of the law, these concerns remain
unfounded in practice. Nevertheless, this new law provides hope for
foreign investors that the Chinese are becoming more liberal with their
regulations on establishing a business in China
Another trend that investors must keep an eye on is the constant
revision of intellectual property (IP) rights, especially if the franchise
necessitates patent protection. The State Council is constantly refining
the law in order to ensure adequate protection, but has yet to acquire a
strong enforcement mechanism that prevents numerous IP infringements.
Recently, there have been several proposals, symposiums and declarations
from the government addressing issues regarding the lack of protection.
Finally, investors, both foreign and domestic, should acquire legal
counsel to help navigate the evolving laws of the PRC.
32. It is advisable that each foreigner engages in ongoing consultation with
a Chinese partner.
33. Describe the aspects of competition law in your country that are relevant
to the typical franchisor. How are they enforced?
In order to best protect the evolving needs of the current market
economy, China has adopted its first anti-monopoly law, effective
as of 1 August 2008. This law provides guidelines towards limiting
the monopolization of the market by both foreign and domestic
enterprises. The law itself is intentionally vague so as to allow industry
specific regulations to take precedent. Overall, the law prohibits
certain types of agreements unless they fall within an exemption,
prohibits behaviors classified as abuse of dominant market position,
provides a framework for determining when dominance exists,
establishes a broad merger review scheme and, most importantly,
prohibits abuse of government administrative powers restraining
34. Very briefly describe the court system. What types of dispute resolution
procedures are available relevant to franchising?
The highest court is the Supreme People’s Court, which supervises
all subordinate local and special people’s courts. The Local People’s
Court includes, in ascending order, the Grass-roots People’s Court,
the Intermediate People’s Court and the Higher People’s Court. Generally,
the Grass-roots People’s Courts are located at the municipal
district and autonomous county level.
The Intermediate People’s are established in capitals or prefectures at the provincial
level. The Higher People’s Courts, located in all provinces, autonomous
regions, and municipalities, are directly under the control of
the Central Government. China practices a system of courts characterized
by ‘two instances of trial’ where the judgments and orders of
the appeal shall be seen as final decision of the case. It is important to
note that most cases are rarely litigated and are rather settled through
administrative agencies or party negotiations. Preferable for franchising
claims is arbitration, which is considered another practical and
quick approach for dispute resolution.
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